Question regarding Quit Deed Claim and Auction.com

[Changseok Kim]

Hello BP members, 

I have a question regarding foreclosure sales and Quit Deed Claim. 

I found a bank owned property that went on sale at Auction.com. When I went there to check out the property, I found a sign saying that the property was purchased by a company through Quit Deed Claim, and the property will be redeemed by Oct 2022. 

So I checked the public record to see how the title has been transferred. The title of the property was transferred to the company through the Quit Deed Claim in Jan 2022, but the property went through sheriff sales on May 2022, and now the property is on sale at Auction.com. I observed the same thing done by the same company before. 

Here are my questions:

(1)  Why does this company let the Sheriff Sale happen if they already purchased property from the previous owner?

(2) What happens if I purchase this property from Auction.com? Since the property went through the sheriff sale and now bank-owned property, would the property be mine if I purchase from Auction.com?

I will appreciate your guidance. 

Thank you!

[Bob Reinhard]

 If you If you bid at the auction and win you will not be buying the property from auction.com; only bidding on their platform. It acts as agent for the owner of the property and the owner of the property will transfer title to you through its legal representatives.
Please also be guided accordingly if you will be bidding, because auction.com will bid against you on behalf of its client this is disclosed but most people fail to realize this.
Much success.

[Changseok Kim]

Currently it is shown as a bank owned property. So my guess is the property was not sold at sheriff sale, and the bank currently owns it. 

Thank you for the information about auction.com

[Mike Hern]

Quote from @Changseok Kim:

Hello BP members, 

I have a question regarding foreclosure sales and Quit Deed Claim. 

I found a bank owned property that went on sale at Auction.com. When I went there to check out the property, I found a sign saying that the property was purchased by a company through Quit Deed Claim, and the property will be redeemed by Oct 2022. 

So I checked the public record to see how the title has been transferred. The title of the property was transferred to the company through the Quit Deed Claim in Jan 2022, but the property went through sheriff sales on May 2022, and now the property is on sale at Auction.com. I observed the same thing done by the same company before. 

Here are my questions:

(1)  Why does this company let the Sheriff Sale happen if they already purchased property from the previous owner?

(2) What happens if I purchase this property from Auction.com? Since the property went through the sheriff sale and now bank-owned property, would the property be mine if I purchase from Auction.com?

I will appreciate your guidance. 

Thank you!

 The investor is practicing sloppy investing.

In some jurisdictions, there is a redemption period for sheriff's sales. It may be that the investor wanted the seller to commit to selling to the investor, the investor wanted that in writing (Quit Claim Deed) and the investor is bringing in the money to redeem the property, pay the seller a specified amount and taking ownership. It's creative but sloppy. There are several things that can go wrong and the investor (and the seller) are both hoping to pull this off without a hitch.

It's like buying Crypto, sure it sounds like a great idea, but there are many landmines along the way.

[Changseok Kim]

Thank you for sharing your insight. I am still trying to understand the logic behind this. 

It is a great idea to approach the seller before sheriff sale, then why the company did not stop the sheriff sale? Michigan has 6 month redemption period, but does not the company need to pay off mortgage+interest to redeem the property? Now I guess the owner of the property is the company (due to Quit Deed Claim), so the company still need to pay the mortgage+interest to redeem the property. Wouldn't it have been better to pay off the mortgage before sheriff sale and stop the foreclosure? Also I thought foreclosure process slash the credit of the property owner (in this case, the company who purchased it). Why would they damage on their credit by letting it go through the sheriff sale?

It is so confusing......

[Wayne Brooks]

@Changseok Kim It doesn’t affect you at all….if it goes to the auction, they get wiped out.

[Drew Sygit]

@Changseok Kim buyer could be a wholesaler that doesn't have the funds to redeem, but is looking to flip it to a buyer that does, at a higher price than what they got the QCD for.

FYI - banks have to buy the property at the sheriff sale to keep it as REO.

[Changseok Kim]

@Drew Sygit

Thank you, but I thought the property will be owned by the bank if no one bid on the property at foreclosure? Am I wrong?

[Changseok Kim]

@Wayne Brooks Thank you, but could you elaborate a bit more? I did not understand what you mean...

[Wayne Brooks]

Quote from @Changseok Kim:

@Wayne Brooks Thank you, but could you elaborate a bit more? I did not understand what you mean...

 An owner quit claiming a property to someone else has no effect whatsoever on a bank foreclosing….their security is the Property.

I’ve never seen a bank offer up a property that still had any time remaining on a redemption period (assuming there Is a redemption period in that state).

Is the property rented?  I suspect this “sign” you saw is just something put by the guy who the property was quit claimed to, trying to discourage/scare bidders at the auction….or they are just delusional.

Read the auction terms for this property, title insurance typically always included.

What state is this? Is there a redemption period there for mtg foreclosures?

[Changseok Kim]

@Wayne Brooks

It is michigan. Yes we have 6 month redemption period. 

[Drew Sygit]

@Changseok Kim not exactly. Banks usually bid their mortgage balance to ensure they recoup it or fair market value so they can pursue borrower for the difference.

[Wayne Brooks]

Quote from @Changseok Kim:

@Wayne Brooks

It is michigan. Yes we have 6 month redemption period. 

Read the disclosures on their site for this specific property…it sounds like there is a legit redemption period through October, if so I’d certainly pass.  Might be worth talking to a local attorney…in some states redemption periods differ depending on whether the property was owner occupied or not.